Oil India Limited · NSE:OIL
Oil India — Investor Presentation (November 2010)
45 slides from Oil India's investor presentation, November 2010
Slide 1: Investor Presentation
Investor Presentation A Navratna Company November, 2010
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward looking statements concerning OIL India’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements.
Slide 3: Sector Fundamentals
atae sisar tates Oil India Limited Sector Fundamentals
Slide 4: Global Oil and Gas Trends
Global Oil and Gas Trends Brent oil price futures/forwards and forecasts LTM oil price and equity market performance (USD/bbl) (Rebased to Brent) 160 85 140 75 120 +115% 100 65 +76% 80 55 60 45 +32% 40 35 20 0 25 2003 2005 2007 2009 2011 2013 Mar-09 Jun-09 Aug-09 Nov-09 Mar-10 Broker high/ low range
Slide 5: Domestic Industry Environment
Domestic Industry Environment Steady growth in domestic energy consumption Energy sources (%) driven by India’s economic growth story1 Crude oil and natural gas sources would tend to grow (mmtoe) 469 in significance as the Indian economy develops 433 379 Energy Sources - India 344 295 261 Natural Nu
Slide 6: India: Energy Scenario
India: Energy Scenario Primary Energy Consumption (MTOE) Crude Oil Consumption (MTOE) Iran 205 Canada 97 S Korea 238 Brazil 104 France 242 S Korea 104 Germany 290 Germany 114 Canada 319 UAE 122 Japan 464 Russia 125 India 469 4.2% of total India 149 3.4% of total Russia 635 Japan 198 China 2,177 Chin
Slide 7: OIL India – An Overview
atae sisar tates Oil India Limited OIL India — An Overview
Slide 8: Oil India: Brief Overview
Oil India: Brief Overview Rich Heritage Independent India’s first commercial oil discoveries, with the first made in 1953 Integrated O&G Player Presence across Oil & Gas Value Chain (E&P, Transportation and Downstream) Infrastructure to support growth Large Acreage Domestic acreage: 127,879 square k
Slide 9: Shareholding pattern
Shareholding pattern 3.8% 0.6% 1.7% 3.2% 12.3% 78.4% Promoters (GOI) Bodies Corporate Public & Others FII MF FI / Banks Key shareholders % Shareholding Indian Oil Corporation 4.45% Bharat Petroleum Corporation 2.23% • Listing :Listed on BSE/NSE on 30th Sept 2009 Hindustan Petroleum Corporation 2.23%
Slide 10: Performance of OIL's Shares (w.r.t. Sector)
10 SHARE PRICE ` SHARE PRICE ` 1300 1350 1400 1450 1500 1550 1250 1320 1390 1460 1530 04-Oct-10 05-Oct-10 04-Oct-10 06-Oct-10 05-Oct-10 07-Oct-10 06-Oct-10 07-Oct-10 08-Oct-10 08-Oct-10 11-Oct-10 11-Oct-10 12-Oct-10 12-Oct-10 13-Oct-10 13-Oct-10 14-Oct-10 14-Oct-10 15-Oct-10 OIL 15-Oct-10 18-Oct-10
Slide 11: Performance of OIL's Shares (w.r.t. SENSEX / NIFTY)
11 SHARE PRICE ` SHARE PRICE ` 1300 1350 1400 1450 1500 1340 1360 1380 1400 1420 1440 1460 1480 1500 04-Oct-10 1520 04-Oct-10 05-Oct-10 05-Oct-10 06-Oct-10 06-Oct-10 07-Oct-10 07-Oct-10 08-Oct-10 08-Oct-10 11-Oct-10 11-Oct-10 12-Oct-10 12-Oct-10 13-Oct-10 13-Oct-10 14-Oct-10 14-Oct-10 15-Oct-10 15-O
Slide 12: OIL has Outperformed the Benchmark Indices Since Listing
OIL has Outperformed the Benchmark Indices Since Listing 140% 130% 28.3% 120% 14.4% 110% 3.8% 3.4% 100% 90% 80% Sep 09 Nov 09 Jan 10 Feb 10 Apr 10 Jun 10 Source: Bloomberg as on June 30, 2010 Oil India ONGC BSE Oil & Gas Index SENSEX 12 A NavRatna Company
Slide 13: Our Vision
Our Vision "The fastest growing energy company with a global presence providing value to the shareholder" Fastest growing Energy Company with highest profitability. Delight customers with quality products and services at competitive prices Learning Organization, nurturing initiatives, innovations an
Slide 14: Rich heritage of building a company
Rich heritage of building a company • Independent India’s first commercial oil discoveries were made by Assam Oil Company – Nahorkatiya, Assam – 1953 – Moran, Assam – 1956 • Incorporated as Joint Sector Company on 18 February, 1959 – 2/3rd Owned by Assam Oil Company / Burmah Oil Company – 1/3rd Owne
Slide 15: Integrated Oil & Gas Player
Integrated Oil & Gas Player Exploration Production Transportation Downstream Domestic: 30 E&P 50 years of Crude Oil: Refining and blocks1 experience – 1,157 km pipeline ; marketing petroleum FY 10 Produced ~6 MMT capacity products: International: Egypt, 25.70 mm bbl of – 26% equity stake Gabon, Iran
Slide 16: Strong Domestic Acreage Base
Strong Domestic Acreage Base Blocks Op N/Op Total NELP 12 18 30 AA-ONN 30% Pre-NELPJV - 3 3 PEL (Nom) 19 - 19 AA-ONN 90% PML 13 - 13 AA-ONN 50% ASSAM +AP Total 44 21 65 AA-ONN 85% AA-ONN 50% 60% RJ-ONN AAP-ON 16% AA-ONN 20% 60% RJ-ONN AA-ONN 15% AA-ONN 85% 75% RJ-ONN AA-ONN 10% MN-OSN 20% MZ-ONN 75%
Slide 17: With Dominant International Footprint
With Dominant International Footprint LIBYA EGYPT 50 7,087 Area 86 Block 3 8,287 25 50 2,710 Area 102/4 Block 4 2,600 (GSPC) 25(Sonatrach) 6,629 Area 95/96 NIGERIA SUDAN 741 km 10 17.5 (Summit) 2,094 OPL 205 Pipeline GABON IRAN 45 3,761 Shakti Farsi Offshore 3,500 20(OVL) TIMOR LESTE 12.5 3.5 Block
Slide 18: Exploration and Development Growth Mapping (Acreage)
Exploration and Development Growth Mapping (Acreage) Acreage (Sq. Km) ~ 10 Times Growth 180000 Current Acreage 160000 Domestic = 127,879 sq.km 140000 Overseas = 41,656 sq.km 120000 NELP 100000 (1999 onwards) 80000 60000 + Overseas 40000 Nomination Including Pre- (2005 onwards) 20000 NELP JVs (Till 1
Slide 19: Strong Reserve Base with Significant Growth Potential
Strong Reserve Base with Significant Growth Potential In MMBBL As on 01/04/2010 1600 1,437 1400 1200 522 957 1000 800 377 600 521 915 400 239 580 200 282 0 1P 2P 3P Crude Oil Natural Gas 1P Reserves represent: ≥ 11 Years current production of Crude Oil ≥ 15 Years current production of Natural Gas ≥
Slide 20: Healthy and Consistent Reserve Replacement Ratio
Healthy and Consistent Reserve Replacement Ratio Reserve Replacement Ratio (x) 1.59 2.04 2.04 1.69 1.65 Crude Oil and Natural Gas (O+OEG) Production and Reserve Accretion (in MMTOE) 10.4 10.3 9.4 9.7 8.4 5.6 5.9 5.3 5.1 5.1 FY2006 FY2007 FY2008 FY2009 FY2010 Production (O + OEG) Accretion Adequate r
Slide 21: Integrated In-house E&P Infrastructure To Support Growth
Integrated In-house E&P Infrastructure To Support Growth Infrastructure to Support E&P Activities Production & Storage Facilities Two 2D and 72 Six Logging One 3D Production Seismic Crew Trucks Installations 5,000 Km ~150k KL 14 W/over 11 Drilling O&G Crude Rigs Rigs Pipelines Storage In house Exper
Slide 22: Strategy to Deliver Long Term Growth and Shareholder Value
Strategy to Deliver Long Term Growth and Shareholder Value 1 Use Advanced Techniques to Improve Existing Productivity Continue to induct world class technology 5 Explore Non-conventional 2 Increase Reserves and energy sources Production in Existing Acreage Explore alternate energy Further Integrate
Slide 23: Significant Investment Lined Up in Next 2 Years
Significant Investment Lined Up in Next 2 Years USD 1.9 bn of investment plans in the next two fiscal years Significant focus on Exploration and Development of existing acreage potential and M&A 2010-2011: ` 47,964 mn 2011-2012: ` 36,579 mn Overseas M&A Projects 1% 11% Exploration & Appraisal Domest
Slide 24: Planned Activities in FY11
Planned Activities in FY11 3D Seismic Surveys Exploratory Drilling Development Drilling 34 1,798 46 30 984 17 FY10 FY11 FY10 FY11 FY10 FY11 3D Planned in FY11 Assam & AP Major thrust continues – 250 SqKm in Assam – 17 wells planned in to be in Assam & AP & AP (FY10: 744) FY11 (FY10: 13) – 44 wells f
Slide 25: OIL: Strategy in Place To Deliver Long Term Value
OIL: Strategy in Place To Deliver Long Term Value Organic Growth- supported by our E&P Programme – To enhance the production of crude oil on a sustainable basis from the existing assets in NE region – To increase the gas sales significantly in NE region – To discover hydrocarbons in our NELP & overs
Slide 26: Recent Developments
atae sisar tates Oil India Limited Recent Developments
Slide 27: Select Highlights
Select Highlights OIL’s shares listed in Mumbai Stock Exchange on 30.09.2009. Achieved the highest daily rate of crude oil production of 3.71 MTPA (> 26.4 mmbbls/Year) Achieved the highest daily rate of natural gas production of 6.67 MMSCMD in North East and potential of 0.93 MMSCMD in Rajasthan Nav
Slide 28: Select Highlights (Contd.)
Select Highlights (Contd.) Completed 660 Km long NRL – Siliguri Product Pipeline. LPG plant completed 26 years of continuous service with excellent track record of 99% Plant Load Capacity. LPG production of 44,950 tonnes in 2009-10 was 103.1% of target Hydrocarbon discoveries in Assam - FY’10 – Six,
Slide 29: Select Highlights (Contd.)
Select Highlights (Contd.) Q2 Q1 Variance H1 H1 Variance Parameter Unit FY2011 FY2011 (%) FY2011 FY2010 (%) Drilling m 38206 31268 22.19 69404 65290 6.30 Crude Oil Production MMBBL 6.64 5.68 16.90 12.31 12.72 -3.22 Crude Oil Sales MMBBL 6.76 5.55 21.80 12.31 12.85 -4.20 Natural Gas Production BCM 0.
Slide 30: Overseas Update
Overseas Update • Libya – Commerciality of Hydrocarbon could not be established in 2nd well. Drilling in progress in the third well. • Gabon – 100 Sq. Km of 3D Acquisition to be completed by Jan, 2011. Commenced from 22.10.2010. • Venezuela – Mixed Company Contract signed on 12th May, 2010. Action i
Slide 31: NELP Update
NELP Update • Block MN-OSN-2002/2 (Operator – ONGCL) Discovery made and Appraisal plan approved. Four (4) wells drilled including the first appraisal well. Estimated In-place Reserves – 56.91 BCM. • AAP-ON-94/1 (Operator – HOEC) Discovery made and Appraisal plan approved. Initial testing results ind
Slide 32: Operating Performance
stat dtear farses Oil India Limited Operating Performance
Slide 33: Crude Oil and Natural Gas Production
Crude Oil and Natural Gas Production Crude Oil Production (mm bbl) Natural Gas Production (mm scm) 25.70 2341 2415 24.95 2269 22.38 1205 1136 0.93 12.72 12.32 2007-08 2008-09 2009-10 H1 FY'10 H1 FY'11 2007-08 2008-09 2009-10 H1 FY'10 H1 FY'11 • The shortfall in Crude Oil and NG Production at the end
Slide 34: Crude Oil Production Cost (Assam & AP)
Crude Oil Production Cost (Assam & AP) USD/ Barrel 7.09 7.10 7.24 7.24 6.806.80 4.80 4.80 A NavRatna Company
Slide 35: Low Finding & Development Costs
Low Finding & Development Costs Finding and Development Costs (USD / bbl) OIL has the Advantage of Low Finding & Development costs. 35 A NavRatna Company
Slide 36: Financial Performance
stat dtear farses Oil India Limited Financial Performance
Slide 37: Sharing of Subsidy by Upstream Companies
Sharing of Subsidy by Upstream Companies USD mn 2006-07 2007-08 2008-09 2009-10 H1-FY10 H1-FY11 ONGC 3762 5465 6137 2435 629 1853 OIL 441 573 657 327 85 245 GAIL 329 348 368 280 110 172 Total 4532 6386 7163 3042 824 2270 % SHARING 2006-07 2007-08 2008-09 2009-10 H1-FY10 H1-FY11 ONGC 83% 86% 86% 80%
Slide 38: Realized Price
Realized Price (USD/barrel) 83.22 81.69 76.71 68.53 62.6 58.13 57.21 55.57 56.21 56.32 40.11 39.01 39.80 40.38 36.15 FY2008 FY2009 FY2010 H1 FY10 H1 FY'11 Gross Realized Price Realized Price after Subsidy/Discount Net Realized Price 38 A NavRatna Company
Slide 39: Revenue and profitability
Revenue and profitability Revenue and profitability analysis (USD mn) 2,000 1868 Income PAT 1,677 1,600 1,401 1,242 1,239 1,200 929 966 800 550 460 379 367 400 317 308 299 0 FY2006 FY2007 FY2008 FY2009 FY2010 H1 FY2010 H1 FY2011 Note: • Exchange rate 1 USD = 48.52 INR used for figures upto FY2009; f
Slide 40: Networth and Book Value
Networth and Book Value Networth (USD mn) and Book Value Analysis (USD) Networth (LHS) Book Value (RHS) 3,500 3,294 20 3,000 2897 2,792 15 2,500 13.7 1,935 12.05 11.6 2,000 1,629 10 1,406 9.0 1,500 7.6 1,220 5.7 6.6 1,000 5 500 0 0 FY2006 FY2007 FY2008 FY2009 FY2010 H1 FY2010 H1 FY2011 40 A NavRatna
Slide 41: Cash Flow and EBITDA Margin
Cash Flow and EBITDA Margin Cash Flow (USD mn) EBITDA (USD mn) and EBITDA MARGIN (%) 500 120% 450 450 391 100% 400 348 358 344 350 80% 300 250 60% 200 40% 150 100 20% 50 0 0% FY2008 FY2009 FY2010 H1FY2010 H1FY2011 Consistent and Attractive Cash Flow EBITDA EBITDA MARGIN 41 A NavRatna Company
Slide 42: Dividends distribution and Earnings per share highlights
Dividends distribution and Earnings per share highlights Dividends distribution Earnings per share and Debt-Equity ratio 35 360 120 114 0.14 340 340 0.12x 104 33.93 305 320 34 33.56 100 0.12 300 280 86 83 32.9 0.1 33 260 275 240 80 72 265 260 220 0.08 32 200 31.32 60 180 31 160 0.06x 0.06 30.19 140
Slide 43: Guidance: FY11
Guidance: FY11 2009-10 2010-11 (Target) Crude oil production 3.57 mmt 3.70 MMT Natural gas production 2,415 mmscm 2,620 mmscm Increase in Exploratory and Development Drilling Meterage Increase in Work Overs Enhanced Water Injection Endeavour to Enhance LPG production through NGL Recycling Endeavour
Slide 44: Conclusion
Conclusion Stable Operations, Looking for Growth Company with Good Operating Track Record Sound Financial Health Company with more than 5 Decades of E&P Expertise Large Prospective E&P Acreage Entry into Deepwater/Offshore Blocks as Operator Entry into discovered assets in Venezuela, Acquisition Thr
Slide 45: Thank You
Thank You ee \